Goodnight Moon, Goodnight Ethanol Subsidies

May it be so. It would appear that the inefficiencies (or perhaps just the political headwinds) of continuing support for ethanol subsidies have gotten the attention of a number of senators of both parties:

The letter [calling for an end to federal government subsidies of ethanol], which I obtained from a source, was authored by senators Dianne Feinstein and Jon Kyl, and includes a number of Democrats and Republicans, including John McCain, Susan Collins, Richard Burr, and Mike Enzi. This is key, because the question of whether the subsidies should expire is emerging as a key test — just like earmarks — of whether Republicans are serious about reining in spending and the deficit.

While this issue could divide Dems along regional lines, it’s more directly revelant to the GOP. With leading GOP senators now coming out for letting the subsidies expire, this could up the pressure on Republican senators who backed the subsidies in the past, such as Chuck Grassley and Orrin Hatch, putting them on the wrong side of what may emerge as a key litmus test for the Tea Party and potentially dividing the GOP caucus.

I would agree that this issue, like the issue of earmarks, is about whether Republicans will once again support a government which is fiscally responsible. I trust that Senator Thune is paying attention–though he will find it doubly difficult to admit that backing ethanol in the next farm bill, or however it may be done, is not good policy.

The letter which is referenced above has surprisingly straightforward and blunt language. Here’s a little piece:

Subsidizing blending ethanol into gasoline is fiscally indefensible. If the current subsidy is extended for five years, the Federal Treasury would pay oil companies at least $31 billion to use 69 billion gallons of corn ethanol that the Federal Renewable Fuels Standard already requires them to use.

“Fiscally indefensible” is college-level speak for “stupid.” I am hopeful that reason may yet reign within the ethanol industry.

It is about time that the Senate began looking at everything from the “can we afford it” standpoint. I realize that it is not yet the “is it properly supported by the Constitution” standpoint, but at least it would seem possible that things are headed in the right direction.

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